The Potential of a New Business Idea - Case Study Example

Course name: Professor’s name: University name: City, State Date of submission: INTRODUCTION Many enterprises start as an idea of one person. This one person identifies a business opportunity in the market and ceases it. He or she develops the idea to a working business. Thisentrepreneur is a risk taker, driven by achievement and self-motivated. These attributes helps him or her to grow the business into prosperity. From these small enterprises, a large business emerges if well managed. BODY Definition of terms used in business Enterprise Enterprise which is another name of a business is described as the actions of a person to take an initiative and risk, start and run a successful business [Gel10]. On the other hand, risk is the probability that things may go as planned or wrong, which is, investment may yield a profit or a loss. The person taking the risk to invest has to be ready to take the responsibility of paying debts that the business incurs. The only trick in taking a risk is being sure that if the investment works the gains are worth the risk taken[Gel10]. Entrepreneurship These are the skills and capability required to start and run a successful business [Gel10]. It refers to the ability to identify a business opportunity and to implement a business idea based on the opportunity available. One does this by coming up with a working business idea, gathering resources available, ensuring that production works in accordance to the business plan, by also adverting, marketing and promoting the products he is selling, managing the risks involved with business and lastly by working towards the growth and prosperity of his or her business[Gel10]. Intrapreneurship It is explained as the way an employee acts like an entrepreneur while working within a big company. These employees’ work is to bring new technology to the company, to increase efficiency and the company’s productivity rate and lastly they comes up with new products or services for the company. By doing these the will be working as an entrepreneur for the company[Ahu01]. SKILLS, ATTRIBUTES AND BEHAVIOURS OF ENTREPRENEURS Skills and Behaviors of entrepreneurs (All developed from) [And11] Making of well thought decisions from very little information that affects their businesses positively He or she looks for new business opportunities, ceases them and takes the risk to invest in these new opportunities He or she is able to cope with uncertain and complex situations that affect the business He or she takes the initiative to invest given a new opportunity which may seem as a big risk to invest in. An entrepreneur is able to create know-how and also develop trust relationship with his or her employees, suppliers and customers. An entrepreneur is able to create and develop working networks with other entrepreneurs, workers, suppliers and his or her customers. When his or her business is subjected to a challenge an entrepreneur solves these challenges creatively. An entrepreneur is able to asses a given business opportunity critically and takes well calculated risk to invest in these new enterprise opportunity. An entrepreneur has very high negation capacity. These helps him or her to negotiate deals that will bring prosperity to their enterprise. An entrepreneur selling and persuading capacity is of very good quality which enables him or her to sell a large quantity of goods. An entrepreneur has the ability to think strategically. This means that before he or she makes any decision that involves the enterprise he or she is able to look at how this decision will affect the future of the business Attributes Attributes of an entrepreneur includes sense of self believe, a strong sense of independence, driven to achieve stated goals, fully committed to see all his or ideas work and has a sense of ownership over problems that affect the enterprise [Bus03]. Importance of enterprise, entrepreneurship and small business Development of personal relationships In small enterprises, it is very easy for the entrepreneur to create personal relationships with his or her workers, suppliers and customers [Bri12] . This is because you interact with these people on a daily basis and thus very easy to put a face to every one of them. These daily interactions make it very important for the entrepreneur to developed personal relationship with these people. By doing so it makes it very easy for the enterprise to grow into a big business venture since a good personal relationship with workers, suppliers and customers provides a platform for business growth [Bri12]. Flexibility in responding to problems and challenges In a small business, the chain of command is very small. In large business it is hard to change the set ways of operating the business. Their set procedures require time before they can be changed because it will require time for the business owners to sit down and evaluate new procedures to adopt. In small business these is very easy since it requires only the decision of the entrepreneur. This enables the enterprise to grow fast. [Bri12] Innovation and inventiveness In small business, it is quite easy to come up with new ideas and implement them. This is due to the fact that the entrepreneur will not need to discuss or require any approval form someone else. This freedom to do what you want and take risks without critics of other people is what makes small enterprises develop to big businesses really fast [Bri12]. Low overheads Overhead costs in small enterprises are very low. This is due to their small scale of operation. The amount of bills that small enterprise pay is little making it easy to sell their products at a low cost [Bri12]. Catering for limited markets unlike large enterprise who have to produce large quantities of products in order to make profits, small business are able to make profits from lower amounts of sales [Bri12]. Lastly, the reason why most people run small enterprises is because they are their own boss. This gives them a sense of independence and also the profits from their enterprises is not shared [Bri12]. Stages necessary to evaluate a new business idea Self-analysis In most cases, small business fail because of the owner’s inability to properly manage business resources [And07].. It is very important to look into your own interests, goals and desire before you choose to invest in a business opportunity. You should evaluate your willingness to take a risk and also the amount of time you a willing to allocate to these new opportunity. It is also very important to look at your own marketing skills before investing in a business opportunity [And07]. Financial components After you have evaluated yourself, it is now important to look at the amount of resources you have to invest in these new business opportunity [And07].. It is important to raise part of the money that you will require in investing in the identified. With some part of the money required in investing in a new business it is now very easy for financial institutions to lend the other part of the money. Market research After you have looked at the amount of money required to invest and identified the source. It is now very important to conduct a well detailed research on the available market for the product you are planning to bring into the market. You are supposed to learn the purchasing patterns of the buyers, know who your customers are going to be and where they are located and more importantly, know who your competitors are going to be [And07].. Risk assessment Assessing risk is very crucial before investing. It is important to calculate the risk that you are going to take in investing in the business idea. These helps you prepare for thechallengesassociated with a given business opportunity. Assessing the risk involved in investment enable you to know whether the amount of returns you are targeting to get are worth the risk [And07]. Support Lastly, it is important to look at the amount of support you will get from family, friends and community. Since these are going to be your number one customers, it is very important to ensure that your business does not affect your relationship with these people negatively [And07]. Critique of common misconceptions around the above issues (All developed from) [Ara00] . Most small business owners believe that their small enterprises are not a target which is not true. All businesses whether small or big have a valuable thing that makes them a target Small enterprises believe that they do not require an acceptable use policy because they have a very small number of employees and treat each other like family [Ara00]. These is a misconception because you do not know who is planning to steal from you Owners of small enterprise believe that they do not require a disaster recovery plan. This is dangerous misconception because if a disaster strikes every business loses essential amount of data and products. Recommendations [And07] Before starting a business you need to plan how you are going to run it, that is prepare a business plan Choose a suitable business location by looking at the accessibility to the business by the targeted customers and also the competitors in the field . Calculate the risk associated with you investment well to avoid losing it [And07]. Conclusion In conclusion, if an entrepreneur carefully follows the above procedure in starting and running a business, he or she will prosper in the chosen field. An entrepreneur needs to adhere to the provided recommendations if he or she is to make it in a business venture. References Gel10: , (Gelderen, 2010), Ahu01: , (Ahuja, 2001), And11: , (Griffiths, 2011), Bus03: , (Busenitz, 2003), Bri12: , (Bridge, 2012), And07: , (Griffiths, 2007), Ara00: , (Arabsheibani, 2000), Read More